10. Political Engagement
Quick Read
Corporate political engagement is a significant risk area for bribery and corruption, while public perceptions of lobbying and corporate influence in the political process threaten reputational damage.
Companies engage with the political process with the aim of benefiting the business and meeting the interests of stakeholders. Companies may, for example, be seeking to improve the business and economic environment, create new markets and opportunities, and improve, modify or even prevent commercially damaging legislation.
Despite the strong business case, corporate political engagement is a significant risk area for bribery and corruption, and public perceptions of lobbying and corporate influence in the political process threaten reputational damage. The consequences of improper, negligent or inadvertent engagement in political activities can be substantial. This includes exchanges of people between the public and private sector, such as secondments or senior hires (the ‘revolving door’). Careful stewardship and transparency about these activities are needed to ensure there is no attempt at improper influence and that therefore stakeholder trust is not lost.
Amid growing legislation and pressure from investors, often sparked by political scandals, companies are becoming increasingly transparent about their political activities. Many companies have prohibited political contributions, and some are beginning to participate in policy debates more openly, for example by including government consultation submissions on their website.
The foundation of this guidance is that responsible corporate political engagement is carried out within a framework of good corporate governance and commitments by the board to integrity, accountability and transparency. By designing and implementing policies and procedures, companies that interact with the political process can ensure their activities contribute to the democratic process, benefit their business, and are carried out with integrity.
Key elements
- Ensure the board has oversight of the company’s political engagement and the CEO or a senior manager has responsibility for managing political activities as a whole.
- Integrate the approach to managing all forms of political activity, even where different functions are responsible for different activities.
- Be transparent about your principles, policies and procedures for political engagement, as well as your public policy positions, political donations and lobbying activities.
